1. The Profit-maximizing Level of output for a perfectly competitive firm in the short run occurs...

1. The Profit-maximizing Level of output for a perfectly competitive firm in the short run occurs where:

a. marginal revenue equals price

B. Total revenue equals total cost

C.marginal cost equals price

D. Average revenue equals average total cost

2. Marginal revenue is a firms:

A. Ratio of the change in total revenue to change in output.

B. Profit per unit times the number of units sold

C. Ratio of average revenue to total revenue

D. Increase in profit when it sells an additional unit of output

3. In the short run, if P>ATC, a perfectly competitive firm:

A. Produces output and earns zero economic profit

B. Does not produce output and earns economic profit

C. Produces output and incurs an economic loss

D. Produces output and an economic profit

4. For a perfectly competitive firm in the short run if the firm produces the quantity at which:

A. P<ATC, then the firm breaks even

B. P>ATC, then the firm is profitable

C. P<ATC, then the firm is profitable

D. P=ATC, then the firm incurs a loss

5. Consider a perfectly competitive firm in the short run. Assume that it is sustaining a Canamak losses but continues to produce. At the profit maximizing (loss- minimizing) Output , All of these statements are correct EXCEPT:

A. Marginal cost is less than average total cost

B. Marginal cost is less than average variable cost

C. Price is equal to marginal cost

D. Marginal cost is equal to marginal revenue

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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